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Kiplinger: 10 Most Tax-Friendly States for Retirees

10. Pennsylvania

State Income Tax: Flat rate of 3.07%

State Sales Tax: 6%

Estate Tax/Inheritance Tax: No/Yes

Pennsylvania is one of only two states (Mississippi is the other) that exempts all retirement income -- including public and private pensions, IRAs and 401(k) distributions -- from its state income tax. Non-retirement income is taxed at a low, flat rate of 3.07%. Food, clothing and medicine are exempt from state sales taxes. But property taxes can be high in the Keystone State, especially near larger cities. One caveat for the wealthy: Your heirs won't get off so easily. Pennsylvania is one of a handful of states to have an inheritance tax, paid by the heirs.

(iStock)

More From Kiplinger:
Kiplinger’s State-by-State Guide to Retiree Taxes
10 Things You Must Know About Social Security
12 Smart Year-End Tax Moves for 2012



The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.

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